Sale of companies owned by PE funds
In the first half of 2024, private equity exit activity has rebounded following a slowdown in the latter part of 2023. This rise was mainly driven by an increase in exits within the ICT and industrial sectors. Sweden continues to lead with the highest number of exits, while Finland and Denmark are showing a strong recovery, bouncing back from record-low levels in 2023.
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Exits in Nordic buyout in the first half of the year
The number of private equity backed exits continued to climb in the first half of 2024, returning to typical historical levels following a slower close to 2023. This growth was mainly driven by a marked increase in the small and mid-cap exits, which offset the decline in large-cap transactions. One factor contributing to this trend may be expectations of lower interest rates, which could lead to higher company valuations and offer fund managers more favourable exit opportunities.
Large single transactions:
| Company | Company description | Exit type | Buyer | Country |
|---|---|---|---|---|
| Provide housing, support, education and personnel for health and social care. | Share sale | Triton | Sweden | |
| Independent upstream oil and gas company. | Share sale | HitecVision | Norway | |
| Focuses on the commercialization of medicines for rare diseases and specialty care. | Secondary exit | Impilo | Sweden |
In September, KKR and Impilo announced the completion of their joint acquisition of Immedica Pharma. The strategic partnership was announced in April, with KKR and Impilo aiming at working together to support the business’ growth as it continues to build on its position as a leader in the European rare disease space. Immedica Pharma, founded by Impilo in 2018, is now seeing Impilo`s stake being transferred into a single asset continuation vehicle. This is the first time Impilo is using a continuation fund, allowing them to continue their support. KKR invested in Immedica through its KKR Health Care Strategic Growth Fund II.
Sector distribution
In the first half of 2024, the ICT sector stood out as the largest sector in terms of exits in the Nordic buyout segment. Exits in ICT nearly doubled compared to the latter half of 2023, representing 30 percent of all exits—almost twice the historical average. This impressive growth was mainly driven by increased exits from companies specializing in software solutions, such as Kahoot, Leanware and Mobaro.
Despite the high activity, there is no indication of a broad sell-off of ICT companies by private equity funds. In fact, 35 percent of the ICT exits were secondary exits, showing that PE funds were involved as buyers in a significant share of these exits. additionally, as noted in the previous chapter, the ICT sector recorded the highest number of PE investments across all sectors during this period.
Following ICT, the industrial sector ranked second in exits, contributing 23 percent of the total. Although it holds the second spot, exits in the industrial sector have decreased compared to the prior six months and are below historical trends.
Among large-cap exits, the four exits were evenly distributed between the energy sector and health care and life science sector. In the energy sector, HitecVision exited from Vår Energi and Moreld. Meanwhile, in the health care and life science sector, Triton and Impilo exited from Immedica Pharma and Ambea, respectively. Further details can be found in the chapter covering significant single transactions.
If we look at the sector within sales of Nordic buyout companies, it is ICT, industrials, and energy that dominate after the first half of 2024.
72%
of buyout exits in companies within ICT, industrials, and energy
Exits by type
The distribution of exits by type remains consistent with historical trends. The most significant change from the latter half of 2023 is the return of trade sales as the leading exit type, reflecting a 12 percent increase year-over-year. It's also important to highlight that secondary exits remain robust despite a slight dip, aligning with recent years' trends where the number of secondary exits have grown as more capital has flowed into funds. The increase of secondary exits is also backed by the rise in the use of continuation vehicles seen over the past years.
52 percent of the exits were trade sales, while 34 percent of the transactions involved portfolio companies being sold to other PE-funds.
Country distribution
Sweden led the way in exits during the first half of 2024, joined by Norway, which together accounted for 60 percent of the total exits. Finland showcased remarkable growth, with exits doubling compared to the latter half of 2023. Denmark also saw significant growth in exits, recovering from lower levels in 2023.
In the large-cap segment, both Norway and Sweden recorded two exits each, reflecting a strong alignment with the country distribution of large-cap investments.
PE-backed sales are still highest in Sweden, but closely followed by Norway. Finland experienced twice as many exits, while Denmark still is behind historical trends.
One single PE-backed IPO during the first half of 2024
After experiencing a significant decline in 2022 and 2023, IPO activity began to regain momentum in the first half of 2024, signalling a cautious yet promising recovery in the market. Despite this positive trend, there were no PE-backed IPOs in the buyout segment. In the venture segment however, there was one single private equity-backed IPO: the listing of Cinclus Pharma. The company develops small molecules for the treatment of gastric acid-related diseases. The listing received support from existing owners Eir Ventures and Trill Impact, both of whom acted as cornerstone investors in the IPO.
Read more about the listing here.